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April 7, 2015
Who's to Blame for the Oil Price Crash?
When we think of the recent drop in oil prices, the question is not only who started it, but who's responsible for keeping the prices falling.
Yes! I am outraged! Who is responsible for forcing me to pay less than $60 to fill my gas tank? I need a list of names! I have half a mind to write to my congressman!!
I certainly know who I have to thank for the higher oil prices. The Fed wanted excessive risk taking to "drive" up inflation! It even worked for a little while, bless their hearts. Oil was a sure thing they said. Can't lose. Buy heavily leveraged speculative oil plays now or forever be priced out!
No idea what went wrong, again. Everyone "needs" a place to live and everyone "needs" to fill their gas tank. Sure thing housing and oil, baby. That's what I'm talking about.
Okay, so who has the rope? Let's lynch these commie Russian bastards driving down the price of our magical economic elixir!! We deserve higher oil prices and by God, we need to do something!!
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
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At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
16 hours ago
7 comments:
The increased utility per $ we get from the semiconductor sector is kinda scary -- your iPhone 6 has the basic 3D rendering power of my 2006 Mac Pro w/ ATI 3870 . . .
which is why I'm looking forward to the new Apple TV coming out later this year -- looks to be a fusion of the iPhone 6's hw, iOS 8 (9?) APIs, all on an living room HDMI TV like a Playstation or xbox.
Apple's coming very late to this party, but the $99 price point would be a good place for them . . .
Imagine if housing & healthcare had cost curves like the Pentium's, LOL -- which economic sector would find themselves with the whiphand in that utopia ???
Drove to the dentist today. Saw a new housing development from the low 600s. Big houses packed in like sardinesi a can. No longer room for the white picket fence in the white picket fence dream.
sardines in a can... like fat fingers on an iPhone ;)
The population of WA has doubled since 1974, the buildable land has not. Your neck of the woods, more like 6X since 2000.
Plus, of course, the interest rate has fallen by half to 4% since 1974 (and 2000 for that matter), which, perversely, just drives prices higher still, ceteris paribus.
http://research.stlouisfed.org/fred2/graph/?g=16VO
compares 30 year mortgage rates (blue) with hourly wage increases (red)
In a regime of wage inflation like the 1970s, it makes damn good sense to buy something that's going to inflate along with wages (like land), a leveraged bet making the play all the better (just don't be the last one in when the music stops).
For some reason the System put Volcker in charge during Carter's last year in office and he quickly pulled the lever that put a stop to all that.
The Nixon Shock was the first major transition away from the gold standard, and I guess that untethered inflation expectations in the following years.
Then the system we put in place has been one of show austerity, Congress budgets and borrows as if we were still on the gold standard, while the reality is that if we wanted to we could send everyone in the country $10,000 or $10M cash to spend or invest as they wanted.
Except we can bail out TBTF with fiat when needed.
http://research.stlouisfed.org/fred2/graph/?g=16VR
Great system. Mebbe the mouth sounds Dr Paul is making is right and we should burn it all down. Voting for him and then moving overseas would certainly be an interesting experiment.
Troy,
My neck of the woods really are woods. Since I moved into this house in 1997, the trees slowly dwindle and the traffic lights slowly grow though.
I've locked in a third of an acre on my property which is very generous compared to most nearby newer construction. As an intrivert who values quiet, it's nice to have some breathing room.
The growth is a mixed bag. It takes longer to get anywhere but there is more to get to. I was especially pleased to see an indoor ice rink appear just 2 miles from my home. Wasn't here when I moved in. I've gone there quite a few times. Prompted me to buy hockey skates, although I haven't been there in a few years. Hiking is cheaper and can be a bit less painful for relative amateurs. ;:)
yeah, I stayed summers in Centralia with my grandad in the 80s, and going up to the fringe of Seattle was always great.
One family friend had his own lake!
I'd love to summer in e.g. Bellingham and winter in Santa Cruz, LOL -- and Spring in CO and Fall in AZ . . . I see a regular migratory route there . . .
Troy,
I see a government research van in your future. If you ever wake up in your car along your migratory route and are a bit dazed and confused, be sure to look for a radio tracking device clipped to your ear. :)
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